Expert calls for post-mining strategy as global investment interest in South Africa’s mining sector continues to fall.
It is time for South Africa to develop a post-mining economic activities strategy, as the sector’s international investment attractiveness is declining.
This is the view of mining expert David van Wyk, who was reacting to the latest annual survey of mining companies from the authoritative Canadian Fraser Institute, stating that out of 82 investable mining jurisdictions, the country is rated at 68.
The attractiveness index is a combination of perceptions of mineral potential, where the region’s geology encourages exploration investment and perceptions of mining policy.
Expert calls for post-mining strategy
The report stated that investors were concerned about the country’s political stability, socioeconomic agreements and its geological database.
Be that as it may, Van Wyk believes that the country’s mining policies did not cause the decline.
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He said the focus should be on developing the post-mining economic activities that would grow the economy.
“We need to repurpose and reengineer the mines for post-mining economic activities,” he said.
“Minerals are not renewable; mining is therefore not sustainable. We should be looking at planning towards diversification and the evolution of a post-mining economy.”
Mining not sustainable
Van Wyk said some of the biggest mining firms had registered huge profits because mining was not sustainable.
He said the country’s mining police was not the main thing driving potential investors away.
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“As large-scale mining goes into decline because minerals are not renewable and mining is not sustainable, the country will have to make an orderly and just transition into small and medium-scale mining, including artisanal mining,” he said.
However, DA spokesperson on mineral and petroleum resources James Lorimer shared the same view as the study and said the current mining policy was not creating a favourable condition for the investors.
Lorimer said despite the mining investors’ negative perception, Mineral and Petroleum Resources Minister Gwede Mantashe continues with his plans to introduce an amendment Bill that is unpopular with mining companies.
Current policy not creating favourable investors
“He is also spending a great deal of time talking about his critical mineral’s strategy, which is wordy but largely meaningless,” said Lorimer.
“The DA will be submitting public comments on the draft mineral resource amendment to fight back against over-regulation, excessive ministerial power and disastrous B-BBEE [broad-based black economic empowerment] regulation.
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“The annual survey shows how investment into South African mining is hampered by ANC mining policy. Mining is in a recession, which looks to be getting worse. That means the loss of jobs and declining revenues for the cash-strapped fiscus. Mining tax payments halved last year.”
Lorimer said South Africa needed investment-friendly mining legislation and regulation that would involve a wholesale rewriting of mining law and the abolishment of the effect of B-BBEE on the sector, to facilitate investment in the sector.
Need for international investors
National Association of Artisanal Miners spokesperson Zethu Hlatshwayo said as there was a need for international investors, it was also essential to give local mining companies a chance to venture into the industry.
Hlatshwayo said small-scale miners could play a vital role in growing the country’s economy.
